Businesses that systematically incorporate design into their processes have a higher chance of success in the market. They can incorporate designs when introducing new products or services. Innovation by design offers contextual insights and assists in defining innovation opportunities and strategies.
So, in this blog, we will focus on customer-driven innovation by design. Understanding your customer’s needs assists in adjusting your value proposition, rethinking your product or service, and ultimately building a whole new business model around them.
Ways of driving innovation by design:
Understanding the challenges, business operations, context, and your positioning
First of all, let’s look at the objectives of business model innovation: Satisfying the existing but unanswered market needs, bringing new technologies, products, or services to market and mproving or transforming an existing market with a better business model or to create an entirely new market.
In the first step, discuss the company situation with its stakeholders to discover different perspectives. Begin by understanding the challenges the company faces.
In the second step, understand how your business operates or plan out how it should operate if it doesn’t exist yet. Always plan out with a focus on delivering value to your customers. For successful innovation by design, it is important to analyze the existing business model.
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One of the most popular, the Business Model Canvas (BMC) enables the visualization of these key building blocks of a company: customer segments, value proposition, customer relationships, revenue streams, Cost Structure, key activities, resources, and partners.
After creating BMC, it’s better to understand the environment in which the business operates. Take a macroscopic look at the business environment, identify your competitors, then discuss the trends, macroeconomic, and market forces.
User research consultants assist in gathering ideas about the environment where your future business model will operate. It enables your team to assess: threats (e.g. a new competitor), opportunities (e.g. new technology) and constraints (e.g. a new regulation).
Address them so you can ideally turn them to your advantage. Within this stage, make it the most important activity to collect and analyze competitors within a relevant context.
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Understanding your potential customers
In this step, identify all your potential customer segments by filling in the BMC. Select your main customer segment and focus on it. To do this, begin by creating a persona. It gives your customer segment a personality to empathize with them easily and builds customers’ characteristics more tangible and concrete.
Later on, draft an assumptive customer journey. Mapping a customer journey provides insights into how customers experience your product or service. Also, it gives an idea of how to better serve your customers.
Don’t start to believe at this point of knowing your customers very well and not requiring any field research.
Your research should answer questions based on jobs your customer does, pains your customers face, and gains your customers get after the job is finished.
UX UI consulting services combine field observations with interviews to offer the best insights.
Use the value proposition canvas to organize the insights from the interview. The canvas assists in thinking differently about the customers and the offerings.
The value proposition canvas has two sides:
- Customer profile, which is on the right side. It clarifies your understanding of the main customer segment.
- Value map, which is on the left side. It explains how to create value for that customer.
Focusing on solving real problems and defining the value proposition
After getting to know about the jobs that your customers’ are doing with their pains and gains, prioritize them. Prioritizing them assists in designing a value proposition that addresses the things customers really care about. Order them in three distinct columns namely: Most important jobs on top, least important ones at the bottom; most extreme pains on top, moderate ones at the bottom; essential gains on the top and nice-to-have ones at the bottom.
Defining the value proposition: For the next step, identify the value to create for your main customers. An ideal value proposition focuses on the most important jobs, pains, and gains of your customers. The right side of the value proposition canvas comes into play here. It assists in deciding how your products and services will aid your customers in getting their jobs done, and easing out their pains and creating more gains.
Ask these questions to yourself: Which products and services to provide to enable customers to get their most important jobs done, how do the products and services assist customers to alleviate their extreme pains, and how do the products and services can create expected or desired outcomes and benefit customers.
Find a balance between a customer profile and value map canvasses. Doing this will excite your customers about your value proposition.
Ideating, prioritizing, prototyping and testing of solutions
With top ideas from the value proposition canvas quickly sketch multiple value propositions, using the figure below.
After that, convert new value propositions into the form of products, features, services, processes, brand experiences, etc. Brainstorm with your team to figure out what can be possible solutions to deliver the customers.
After brainstorming, list down the solutions and ideas that require prioritization from your multitude of solutions.
Then, build a prototype to bring your ideas to life. Prototyping is all about making rough models of your ideas to explore alternatives. From the many prototyping techniques, begin with some quick hand-drawn paper sketches. It enables exploring radically different directions for the same idea before refining one in particular. Then build wireframes and interactive prototypes, that range from low to high fidelity.
Finally, test out your solutions with customers from your potential target group. Conduct interviews and user tests to know if customers will use your solutions. They will also provide a lot of valuable feedback and insights about its usage and improvements and aid in innovation by design.
Analyzing the market potential
After finishing all the processes, we get a solid value proposition and a desirable product or service. But it’s essential to assess its market potential in order to determine the viability of the business model. These are steps to assessing the market potential:
- Market size: Assess the number of potential customers and the value of the market. It offers insights into the sales potential of your product or service.
- Competition: Assess the market competition, find out the market position of various competitors, and plan out the strategies to tackle them.
- Customer segmentation: Assess the size of your potential target group, analyze if they have clear segments on different parameters like demand, price, sensitivity, etc.
Conclusion
While technology drives innovation, human-centered innovation by design plays a central role in a successful and long term business strategy.
UX research services at Oodles formulate effective business strategies with user research and analysis.
Image source: Google Images
